U.S. Senator Olympia Snowe is up in arms against Amazon[1] since the online retailer released its Price-Check app for Android[2] just in time for the 2011 holiday season. Amazon’s iPhone version was released a year ago, so the uproar now seems less about the app itself and more about Amazon’s poorly timed limited promotion of the app. Amazon gave users a $5 credit for inputting prices of items sold in brick and mortar stores, when they bought the same item through Amazon. Snowe said in a statement:

“Small businesses are fighting everyday to compete with giant retailers, such as Amazon, and incentivizing consumers to spy on local shops is a bridge too far.”

The Internet meme machine has been working overtime on this, with some portraying Amazon as the Grinch for launching this during the one season of the year that smaller retailers can get ahead in terms of sales.

For instance, a group on Change.org has a petition to get Amazon to stop price comparison[3]. They believe that Amazon doesn’t pay taxes or contribute to local economies in the way small businesses do, and, they say, doesn’t have the right to this kind of data from small businesses.

But is Amazon really evil for coming out with both the app and the promotion? Secret shoppers and price comparison services have been around for years. Is having a way to digitally compare prices such a sin?

We’re all Price Sensitive

Many complain that people will walk into a small business, look at an item, then leave when they find out they can get it cheaper on Amazon.

To my point: of course you can get it cheaper on Amazon. You knew that already! If you’re a consumer, and shopping based on price alone[4], that small company never had your business to begin with.

What I’d be more inclined to use the app for is when I’m shopping in a big box store. (‘Is this Spongebob Lego set cheaper at Wal-Mart or Toys R Us than it is at Target?’) In this scenario, small businesses aren’t hurt.

And what about all the small businesses that sell through Amazon? The app isn’t hurting their business.

Market Forces, not Amazon, are to Blame

This app and others like it came out over a year ago (in some cases longer). They haven’t killed off small business yet. While it’s clear that Amazon is competing hard, and could have timed its promotion better in the eyes of some, that hardly proves it’s out to kill American small businesses.

Also, remember that it’s your customers who are buying online — not only because of price but because of convenience and selection. Every year the online sales volume grows[5]. You can’t change this trend by trying to keep customers from getting information.

We’re all small businesses here at Small Business Trends — we’re sympathetic, but realistic too. If you’re worried about Amazon as a retailer, that means you may have to face some unfortunate realities: start selling your product online, or offer the lowest price. Or take a page out of an industry that has had cut-throat competition[6] for years, grocery stores. Shower customers with service[7]. But don’t blame Amazon. They’re not the only ones competing. And much as we may be tempted by the idea, trying to stifle the competition is never a long term solution. If it’s not Amazon today, tomorrow it will be another retailer.